EmploymentQuestion 1015 of 1605
A contractor who is caught operating without required workers' compensation coverage may face a penalty assessment of up to which amount per employee, in addition to other penalties, when illegally uninsured?
a.A flat $200 for the whole business
b.Exactly $50 per employee, one time only
c.No monetary penalty, only a warning letter
d.Up to $1,500 per employee (and up to $100,000 in total assessments in some cases)
Explanation
California imposes stiff penalties on illegally uninsured employers. Beyond the misdemeanor exposure, the state may assess penalties such as $1,500 per employee (when no injury) and can reach $100,000 in aggregate, plus stop orders and additional assessments if an injury occurs. The message is that going uninsured is far costlier than paying premiums.
Law Reference: Labor Code §3700.5; §3722Practice all 1605 questions free — no signup required.
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Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)